New Mexico LLC – How To Form An LLC In New Mexico

A New Mexico LLC is a way to legally structure your business. It offers limited liability protection by separating your personal and business assets. LLCs also have the flexibility and minimal formalities. 

This quick guide will take you through the basics of how to form an LLC in New Mexico. The biggest step to the process is submitting your LLC Articles of Organization to the state for approval.

However, a few more steps are necessary to ensure approval and seamless operation of the limited liability company. Let’s take a look at the steps involved. 

1. Picking The Right Name For Your New Mexico LLC

The name for any LLC in New Mexico should be unique and clearly distinguishable from other entities registered in the state. You probably already have a name in mind for your LLC, but it’s important to see if the name you’ve chosen is acceptable to the state. 

A name shouldn’t be confusingly similar to other entities registered with the state. Additionally, it shouldn’t mislead the general public about the functions and scope of the LLC. Doing a check for name availability on the Secretary of State’s business name database can be helpful.

New Mexico LLC Name Designators

Every LLC in New Mexico should end its name with a proper designator. As you probably know already, LLC is the most commonly used designator. However, the following are allowed for use in the state:

  • Limited Liability Company
  • LLC
  • L.L.C.
  • LC
  • L.C.
  • Limited Company
  • Ltd. Co.
  • Limited Co.
  • Ltd. Company
  • Ltd. Liability Company
  • Ltd. Liability Co.
  • Limited Liability Co.

Name Reservation Requests (Optional)

Should you choose to, you can reserve a name for your LLC in New Mexico without having to form the company. This is a useful idea if you have a name in mind but aren’t ready to start your business just yet. 

Once accepted by the New Mexico Secretary of State, the name reservations are valid for 120 days. The required form can be filed online or by mail. The associated filing fee is $20. 

2. Appoint A New Mexico Registered Agent

Every LLC in New Mexico must appoint a Registered Agent to receive service of process. This agent is responsible for receiving legal documents like lawsuits, summons, subpoenas, etc. on behalf of your LLC. 

A registered agent must have a physical street address in New Mexico. The state doesn’t accept PO Box addresses or similar services. Keeping normal office hours is an important part of a Registered Agent’s job.

Provided the above conditions are fulfilled, the following can take on the role of a registered agent:

  • Any adult, legal resident of New Mexico.
  • Any business entity that’s allowed to do business in the state and maintains a physical address in New Mexico.

It’s worth noting that an LLC can’t serve as its own registered agent. Generally, people choose to go with commercial registered agents. These commercial agents can fulfill the role with professionalism and ease. 

3. New Mexico LLC Articles Of Organization

Filing Articles of Organization New Mexico with the Secretary of State is the key to bringing your LLC into legal existence. As such, you should carefully fill out the Articles of Organization to ensure better chances of approval.

New Mexico currently allows filing Articles of Organization online. The process is fairly straightforward and LLC approval is relatively quick.

The Articles of Organization filing fee or LLC filing fee for New Mexico is at $50.

Though the state doesn’t make direct forms available, you could create the form yourself. Of course, this form must include the requirements for the Secretary of State to approve your LLC.

4. NM LLC Operating Agreement

As with most states, New Mexico doesn’t require an LLC Operating Agreement by law. Then again, the operating agreement remains highly advisable and any responsible LLC should get one, whether it’s necessary or not.

An Operating Agreement is an internal document of your LLC. There is no need to file it with the New Mexico Secretary of State or any other government organization/department.

A detailed agreement increases confidence in a business by showing that it’s operating properly. It may also be useful in a court of law to show that the business and personal aspects of your LLC are being handled professionally.

An agreement can include several points, including the roles and responsibilities of various members, the percentage of the LLC owned by each member, dispute resolution mechanisms, etc. Approach to taxation and hiring, as well as other factors should also be considered. 

While the agreement is extremely relevant to multi-member LLCs, single-member LLCs shouldn’t shy away from one either. 

5. Getting A Federal Tax ID (EIN)

Having an EIN (Employer Identification Number) is important for the day-to-day functioning of any LLC. The EIN is a 9-digit federal tax ID issued to your company by the IRS. 

There is no filing fee for getting an EIN. But, keep in mind that you should file for the EIN only after the New Mexico LLC has been approved by the Secretary of State.

Filing online is the simplest and fastest way of receiving the EIN. The process is instantaneous and you’ll receive the EIN by the time you finish filing. A separate document containing the EIN will be mailed to the provided address, but this can take a few weeks to deliver.

In some cases, it might not be possible to file for the EIN online. These situations will require downloading and filing Form SS-4. Fax and postal mail are both valid options to file this form. It’s usually recommended to file this form via fax as the processing time is fast and the EIN is issued within a few business days. Filings via mail can take several weeks to process.

Having an EIN is useful for several aspects of operating a New Mexico LLC. While taxation is an obvious angle, it’s also relevant for opening business bank accounts, getting credit cards, phone lines, and more. 

6. NM LLC Annual Reports

Unlike most states, New Mexico doesn’t require filing for Annual Reports. You’ll still have to consider taxation, but not having to file annual reports is often a welcome respite.

7. Business Licenses, Permits, And Taxation

Requirements for business licenses, permits, and taxation should be considered on three levels. These are:

  • Local
  • State
  • Federal

The cost of the business license, permits, or registration can vary with the city/county of operation of the NM LLC. Local jurisdictions may have different requirements and fees for businesses. Another factor is the industry of your LLC, which might attract state fee/taxation, or in some cases, even federal requirements for permits.

LLCs in New Mexico should register with the New Mexico Taxation and Revenue Department to fulfill any tax obligations with the state. These tax filings may be completed via mail or by using the New Mexico Taxation Access Portal.

In terms of federal taxation, New Mexico LLCs are pass-through entities by default. This means that the profits/losses from your NM LLC can be reported as part of your own IRS returns. However, the form required can vary depending on whether the LLC is single-member or multi-member.

Similarly, federal taxation requirements can change if you choose to structure the New Mexico LLC as a C-corp or S-corp. Taxation and licenses can be tough to manage if you’re not well-versed with the subject. It is often useful to hire the services of professionals to plan and manage these requirements for you.